Jun. 19, 2014

(L to R) Members of the Retired Detroit Police and Fire Fighters Association, Al Grant, the secretary and treasurer, Greg Trozak, the vice president and Don Taylor, president of the RDPFFA in the conference room of their headquarters in Sterling Heights on Tuesday, June 4, 2013. / Detroit Free Press

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Detroit Free Press Business Writer

The City of Detroit is trying to block a creditor from obtaining information on the personal finances of Detroit retirees.

Lawyers for the city filed an objection to bond insurer Syncora’s request for statistics showing the total assets and income of individual city pensioners.

Syncora, which has repeatedly taken steps to undercut the city’s bankruptcy because it could lose hundreds of millions of dollars, said it would accept individual financial information without names attached. The creditor could present the information as evidence during a massive bankruptcy trial in August that will determine the fate of Detroit’s restructuring plan.

But the city asked Judge Steven Rhodes to reject the request, calling it irrelevant, “extraordinarily broad and personally intrusive.”

Michigan Attorney General Bill Schuette also said late Thursday that he would seek to block the request.

“I oppose Syncora’s effort to gather personal financial information of Detroit pensioners, and tomorrow I will file a formal statement in opposition,” Schuette said in a statement. “Detroit’s retired cops and firefighters worked all their lives to protect us, and now their privacy needs to be protected.”

“The only possible explanation for this outrageous request is that Syncora is attempting to gain a litigation advantage by harassing, oppressing and embarrassing the City and its retirees,” lawyers for the city said in a court filing.

Syncora is seeking information revealing the net worth of Detroit retirees to support its case that financial creditors are being unfairly treated. By one count, Syncora stands to get about 6 cents on the dollar for its Detroit debt — while pensioners will endure much smaller cuts under emergency manager Kevyn Orr’s plan.

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In an e-mail to Detroit lawyers that was filed in court, Syncora attorney Bill Arnault said the bond insurer would be willing to accept a statement that the city does not know the financial health of its pensioners.

“In short, we are trying to determine the extent of the City’s knowledge regarding the location and financial position of the City’s retirees,” Arnault wrote.

Detroit bankruptcy lawyer Greg Shumaker told Arnault that the city does not maintain a “collective database of retiree data” and would not provide a witness to discuss the issue.

The average Detroit civilian retiree gets a pension of about $19,000, while the average police and fire retiree — who does not get Social Security — gets a pension of about $32,000, according to the city.

The city accused Syncora of trying to use the data to torpedo the grand bargain that would allow Detroit to accept the equivalent of $816 million over 20 years to reduce pension cuts and preserve the Detroit Institute of Arts.

Detroit argued it’s clear that pensioners are in a delicate financial situation and would be harmed by cuts greater than have been proposed.

“While the City’s Plan recognizes the reality faced by retirees and provides augmented recoveries to the retirees as a result, Syncora — a billion-dollar insurance company — is offended by that idea and now demands to know how much money those retirees make and what they currently own so Syncora can compare its financial status with theirs,” the city wrote.

“Syncora has no need to delve into retirees’ personal finances to determine that many, if not most, of them would suffer grave hardship if their pensions were reduced any further; rather, that fact may readily be inferred from other, less intrusive sources of information.”